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When conduction a performance feedback discussion, active listening requires • verbal communications only • summarizing what was said and what was agreed to • interruptions to get your point across • summarizing your key points 2 Because practical considerations make job tryouts for all candidates infeasible, it is necessary to __________ the relative level of job performance for each candidate on the basis of available information. • predict • abandon • assign • accept In _____, workers have been fired for refusing to quit smoking, for living with someone without being married, drinking a competitor’s product, motorcycling, and other legal activities outside of work. • constructive discharge • invasion of privacy • defamation • lifestyle discrimination 4 In determining the competitiveness of benefits, senior management tends to focus mainly on • security • cost • worth • value 5 When companies discover they can communicate better with their customers through employees who are similar to their customers, those companies then realize they have increased their _____ diversity. • secondary • internal • primary • external Properly designed incentive programs work because they are based on two well-accepted psychological principles: (1) increased motivation improves performance and (2) • control-based compensation • recognition is a major factor in motivation • the Rucker plan • the Scanlon plan 7 To avoid legal difficulties related to performance appraisals and enhance credibility in court, employers should • present only the manager’s perspective • have friends testify • present only the employee’s perspective • document appraisal ratings and reason for termination Employee demotions usually involve. • a decrease in status and privilege but no loss of opportunity or pay • a cut in pay, status, privilege, or opportunity • an increase in pay and more responsibility • a reduction in pay but no loss of opportunity, status, or privilege If objective performance data are available, which of the following is the best strategy to use? • BARS • work planning and review • summated rating scales • MBO 10 _____ implies that appraisal systems are easy for managers and employees to understand and use. • Sensitivity • Acceptability • Practicality • Reliability 11 _____ analysis is the level of analysis that focuses on employees specifically. • Operations • Individual • Environmental • Employee 12 Hard quotas • systematically favor women and minorities in hiring and promotion decisions • are a commitment to treat all races and sexes equally in all decisions about hiring, promotion, and pay • represent a mandate to hire or promote specific numbers or proportions of women or minority group members • are a concerted effort by the organization to actively expand the pool of applicants so that no one is excluded because of past or present discrimination 13 This made extensive changes to the Employee Retirement Income Security Act (ERISA) of 1974 that governs employer-sponsored, qualified (for tax deferral) retirement-benefit plans. • Employer Cost Shifting laws • The Pension Protection Act (PPA) of 2006 • Short-Term Disability laws • Short-Term Severance Pay laws Training that results in ______ is costly because of the cost of training (which proved to be useless) and the cost of hampered performance. • applicability of training • simulation of training • negative transfer of training • reinforcement of training 15 ____________ is the biggest hurdle to overcome in a pay-for-performance plan. • Inflation • Merit-pay increases • Salary cap performance level • Compensation equation 16 _____ proceeds from an oral warning to a written warning to a suspension to dismissal. • Procedural justice • Due process • Positive discipline • Progressive discipline 17 Which is not a quality of Generation Y? • A blurring of the lines between work and leisure time while on the job • The constant need for stimulation/entertainment • Short attention spans • Inability to handle numerous projects 18 A _____ occurs when parties are unable to move further toward settlement. • mediation • lockout • bargaining impasse • grievance 19 Which question should not be important in evaluating the value of training? • Was the cost of training within the budget? • Did change occur? • Is the change due to training? • Is the change positive related to organizational goals? If employers fail to check closely enough on a prospective employee who then commits a crime in the course of performing his or her job duties, they can be held liable for • loss of consortium • hostile environment • negligent hiring • quid pro quo 21 What can affirmative action assist organizations in achieving that diversity initiatives cannot? • Maximizing creativity • Increased productivity • Correcting specific problems of the past • Maximizing workforce commitment 22 ___________ is the process where managers provide feedback to the employees regarding their past and present job performance proficiency, as well as a basis for improving performance in the future. • Recruiting • Performance management • Placement • Selection 23 Which of the following is a distinctive feature of the U.S. system compared with other countries? • Wages set by arbitration councils • Low union dues and small union staffs • All agreements are of unlimited duration • Exclusive representation 24 What is our country’s income maintenance program? • COBRA (1985) • ERISA (1974) • Social Security • PPA (2006), 401(k) 25 For organizations, _________ is an indirect cost associated with downsizing. • an increase in the unemployment tax rate • severance pay • outplacement • administrative processing 26 Title VII of the _____________ states that top executives in companies receiving government support can retract bonuses, retention awards, or incentives paid to the top five senior executive officers or the next 20 most highly compensated employees based on corporate information that is later found to be inaccurate. • Sarbanes–Oxley Act (2002) • Pay for Performance Act (2009) • American Recovery and Reinvestment Act (2009) • Equal Pay Act (1963) 27 Mary arrives at her new job. Before she can begin actually doing the work, she must complete a series of activities including role playing and virtual reality interactions. What type of training method does Mary’s new employer use? • Simulation • Organizational development • Information presentation • On-the-job training 28 Organizations periodically turn to _________ to meet demands for talent brought about by business growth and a desire for fresh ideas, or to replace employees who leave. • entry-level employees • outside labor markets • former employees • their subsidiaries 29 ________________ include everything in a work environment that enhances a worker’s sense of self-respect and esteem by others. • Social responsibilities • General business strategies • Nonfinancial rewards • Internal pay objectives 30 The Civil Rights Act of 1991 offered what for victims of unintentional discrimination? • Race-norming • Adverse impact • Monetary damages and jury trials • Affirmative action

Which of the following is an advantage of corporations relative to partnerships and sole proprietorships?The group of users of accounting information charged with achieving the goals of the business is its Which of the following financial statements is concerned with the company at a pointin time?An income statementThe most important information needed to determine if companies can pay theircurrent obligations is theA liquidity ratio measures theThe convention of consistency refers to consistent use of accounting principlesHorizontal analysis is also known asHorizontal analysis is a technique for evaluating a series of financial statement dataover a period of timeVertical analysis is a technique that expresses each item in a financial statementProcess costing is used whenAn important feature of a job order cost system is that each jobIn a process cost system, product costs are summarized:An activity that has a direct cause-effect relationship with the resources consumed is a(n)Activity-based costingA cost which remains constant per unit at various levels of activity is aThe break-even point is whereFixed costs are $600,000 and the contribution margin per unit is $150. What is the break-even point? When a company assigns the costs of direct materials, direct labor, and both variableand fixed manufacturing overhead to products, that company is using If a division manager’s compensation is based upon the division’s net income, themanager may decide to meet the net income targets by increasing production when usingAn unrealistic budget is more likely to result when itA major element in budgetary control isThe purpose of the sales budget report is to The accumulation of accounting data on the basis of the individual manager who has the authority to make day-to-day decisions about activities in an area is calledVariance reports areInternal reports that review the actual impact of decisions are prepared by The process of evaluating financial data that change under alternative courses of action is called Seasons Manufacturing manufactures a product with a unit variable cost of $100 anda unit sales price of $176. Fixed manufacturing costs were $480,000 when 10,000 units were produced and sold. The company has a one-time opportunity to sell an additional 1,000 units at $140 each in a foreign market which would not affect its present sales. If the company has sufficient capacity to produce the additional units, acceptance of the special order would affect net income as follows:Carter, Inc. can make 100 units of a necessary component part with the following costs:Direct Materials $120,000Direct Labor 20,000VariableOverhead 60,000Fixed Overhead 40,000If Carter can purchase the component externally for $220,000 and only $10,000 of the fixed costs can be avoided, what is the correct make-or-buy decision?A company has a process that results in 15,000 pounds of Product A that can be sold for $16 per pound. An alternative would be to process Product A further at a cost of $200,000 and then sell it for $28 per pound. Should management sell Product A now or should Product A be processed further and then sold? What is the effect of the action?

1. What can enhance the value of Web-based shopping experiences to serve as personal shopping assistants or Web-site guides?

Tablets
Smartphones
E-mail
Avatars
2. Which of the following can induce a firm to expand into the international arena?
A saturated domestic market
A saturated foreign market
Cater to a domestic mass market
High income level of domestic consumers
3. A company can learn a great deal by analyzing the degrees of brand loyalty. For example, ________ can show the firm which brands are most competitive with its own.
hard-core loyals
split loyals
shifting loyals
switchers
4. Another basis for decision-making is referred to as ________.
ethical dilemmas
ethical practices
correct ethics
situational ethics
5. A music school in Boyles Height, LA, specializes in teaching the guitar and the violin. After a spurt in growth and a few successful years, the school is experiencing a slowdown in sales and stability in its profits due to an increase in competition. The school is in the ________ stage of its life cycle.
decline
growth
obsolescence
maturity
6. Through its cutting-edge point-of-sale inventory, management technology, and highly efficient shipping practices, Wal-Mart is able to keep its inventory expenditure extremely low and to pass these savings on to consumers in the form of low prices. Wal-Mart's strategy is best described as ________.
differentiation
integrative growth
overall cost leadership
market development
7. The effect of exposures on audience awareness depends on the following three factors:
space, communication, and advertisements
height, length, and width
distance, timing, and focus
reach, frequency, and impact
8. What type of strategy consists of geographical pricing, price discounts and allowances, promotional pricing, and differentiated pricing?
Altered pricing
Price adaptation
Regular prices
Fixed pricing
9. The marketing manager needs to know the cost of the research project before approving it. During which stage of the marketing research process would such a consideration most likely take place?
Step 5 – drafting the report
Step 2 – developing the research plan
Step 1 – defining the problem
Step 4 – analyzing the information
10. The ability to meet humanity’s needs without harming future generations is now a top priority in most corporate agenda ________.
rules
righteousness
sustainability
ethics
11. ABC Technology is nearing completion on their product and market research has discovered a competitor is also close to launching a similar product. ABC has decided launch before their competition, this is called ________.
early entry
late entry
parallel entry
first entry
12. 2Wheels conducts exhaustive customer surveys to discover customer preferences and attitudes towards the brand. Sally uses cluster analysis to classify the data and help the company determine the trends in the information. Sally is using the technique of ________.
data accumulation
data marketing
data mining
data governance
13. Which component of a marketing audit includes major developments in income, prices, savings, and credit that affect the company?
Economic
Technological
Cultural
Political
14. Prestige LLC, a small company that manufactures specialty cereals and energy bars, wants to launch a "green marketing" program in response to heightened consumer awareness about environmental issues. What should the company do to maximize the program's chances of being successful?
Focus on the efforts and costs incurred by the company to bring these "green" products to consumers.
Emphasize benefits to the consumer rather than environmental benefits.
Explain the rules and regulations laid out by governmental agencies to protect the environment.
Demonstrate that the products will benefit both customers and the society in the long-term.
15. With ________ as a target market strategy, the firm concentrates on serving many needs of a particular customer group.
market specialization
selective specialization
single-segment concentration
product specialization
16. If the Ford GT is designed to accelerate to 50 miles per hour within 10 seconds, and every Ford GT coming off the assembly line does this, the model is said to have high ________.
durability
conformance quality
interoperability
compatibility
17. BMW's "The ultimate driving machine," American Express' "Don't leave home without it," New York Times' "All the news that's fit to print," and AT&T's "Reach out and touch someone" are all examples of ________.
brand mission
brand personality
brand slogan
brand vision
18. Marketers must see themselves as benefit providers. For example, when a shopper purchases new shoes, he or she expects the shoes to cover his or her feet and allow him or her to walk unobstructed. This is an example of what level in the consumer-value hierarchy?
Augmented product
Pure tangible product
Basic product
Potential product
19. The three guidelines for anticipating management reactions are (1) prior to the crisis during normal day-to day operations, (2) at the moment some event triggers the crisis, and (3) during the crisis situation that triggers the event. These guidelines are the stages for ________.
crisis management
problem-solving
decision making
provoking solutions
20. _______ is an approach that considers different ethnic and cultural segments require targeted marketing campaigns and tactics.
Ethnic-based marketing
Multicultural marketing
Specialized marketing
Diversity marketing
21. Which control should periodically reassess its approach to the marketplace with a good marketing audit?
Performance control
Marketing control
Strategic control
Ethical control
22. What is the perceived monetary value of the bundle of economic, functional, and psychological benefits customers expect from a given market offering because of the product, service, people, and image?
Complete marketing benefit
Total customer benefit
Total management benefit
Ultimate service benefit
23. A social definition of marketing says ______.
effective marketing requires companies to remove intermediaries to achieve a closer connection with direct consumers
marketing is the process of extracting maximum value from consumers to facilitate corporate growth
a company should focus exclusively on achieving high production efficiency, low costs, and mass distribution to facilitate the broadest possible access to the company’s products
marketing is the process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others
24. What type of control focuses on measuring a company’s products territories, customer groups, segments, trade channels, and order sizes to help expand or eliminate any products or marketing activities?
Solvency
Activity
Efficiency
Profitability
25. What are the four characteristics of a marketing audit?
Dependent, non-comprehensive, quarterly, and unannounced
Simple, unique, randomly, and exclusive
Comprehensive, systematic, independent, and periodic
Announced, semi-annually, dependent, and perpetual
26. Which of the following is a strategy that uses the manufacturer’s sales force, trade promotion money, or other means to induce intermediaries to carry, promote, and sell the product to end users?
Lock strategy
Pull strategy
Push strategy
Strategic plan
27. Which method identifies the effect sponsorship has on consumers brand knowledge?
Supply-side method
Pricing method
Demand-side method
Positioning method
28. Marketers need to identify the hierarchy of attributes that guide consumer decision making in order to understand different competitive forces and how these various sets get formed. This process of identifying the hierarchy is called ________.
market estimation
market partitioning
market valuation
brand association
29. New-to-the-world products are ________.
existing products that are targeted to new geographical markets
new product enhancements that supplement established products
low-cost products designed to obtain an edge in highly competitive markets
new products that create an entirely new market
30. A firm must know where to position its product based on price and ________.
promotional efforts
quality
communication
region

2. Which of the following is a principal within the agency relationship?

3. Which of the following presents a summary of the changes in a firm’s balance sheet from the beginning of an accounting period to the end of that accounting period?

4. Teakap, Inc., has current assets of $ 1,456,312 and total assets of $4,812,369 for the year ending September 30, 2006. It also has current liabilities of $1,041,012, common equity of $1,500,000, and retained earnings of $1,468,347. How much long-term debt does the firm have?

5. Gateway Corp. has an inventory turnover ratio of 5.6. What is the firm's days's sales in inventory?

6. Your firm has an equity multiplier of 2.47. What is its debt-to-equity ratio?

7. Which of the following is not a method of “benchmarking”?

8. Jack Robbins is saving for a new car. He needs to have $ 21,000 for the car in three years. How much will he have to invest today in an account paying 8 percent annually to achieve his target? (Round to nearest dollar.)

9. Ferris, Inc., has borrowed from their bank at a rate of 8 percent and will repay the loan with interest over the next five years. Their scheduled payments, starting at the end of the year are as follows—$450,000, $560,000, $750,000, $875,000, and $1,000,000. What is the present value of these payments? (Round to the nearest dollar.)

10. Ajax Corp. is expecting the following cash flows—$79,000, $112,000, $164,000, $84,000, and $242,000—over the next five years. If the company's opportunity cost is 15 percent, what is the present value of these cash flows? (Round to the nearest dollar.)

11. Jayadev Athreya has started on his first job. He plans to start saving for retirement early. He will invest $5,000 at the end of each year for the next 45 years in a fund that will earn a return of 10 percent. How much will Jayadev have at the end of 45 years? (Round to the nearest dollar.)

12. Serox stock was selling for $20 two years ago. The stock sold for $25 one year ago, and it is currently selling for $28. Serox pays a $1.10 dividend per year. What was the rate of return for owning Serox in the most recent year? (Round to the nearest percent.)

13. Regatta, Inc., has six-year bonds outstanding that pay a 8.25 percent coupon rate. Investors buying the bond today can expect to earn a yield to maturity of 6.875 percent. What should the company's bonds be priced at today? Assume annual coupon payments. (Round to the nearest dollar.)

14. Next year Jenkins Traders will pay a dividend of $3.00. It expects to increase its dividend by $0.25 in each of the following three years. If their required rate of return is 14 percent, what is the present value of their dividends over the next four years?

15. TuleTime Comics is considering a new show that will generate annual cash flows of $100,000 into the infinite future. If the initial outlay for such a production is $1,500,000 and the appropriate discount rate is 6 percent for the cash flows, then what is the profitability index for the project?

16. What decision criteria should managers use in selecting projects when there is not enough capital to invest in all available positive NPV projects?

17. The WACC for a firm is 13.00 percent. You know that the firm's cost of debt capital is 10 percent and the cost of equity capital is 20%. What proportion of the firm is financed with debt?

18. If a company's weighted average cost of capital is less than the required return on equity, then the firm:

19. Gangland Water Guns, Inc., is expected to pay a dividend of $2.10 one year from today. If the firm's growth in dividends is expected to remain at a flat 3 percent forever, then what is the cost of equity capital for Gangland if the price of its common shares is currently $17.50?

20. A firm's capital structure is the mix of financial securities used to finance its activities and can include all of the following except

21. Dynamo Corp. produces annual cash flows of $150 and is expected to exist forever. The company is currently financed with 75 percent equity and 25 percent debt. Your analysis tells you that the appropriate discount rates are 10 percent for the cash flows, and 7 percent for the debt. You currently own 10 percent of the stock.

If Dynamo wishes to change its capital structure from 75 percent to 60 percent equity and use the debt proceeds to pay a special dividend to shareholders, how much debt should they issue?

22. Turnbull Corp. had an EBIT of $247 million in the last fiscal year. Its depreciation and amortization expenses amounted to $84 million. The firm has 135 million shares outstanding and a share price of $12.80. A competing firm that is very similar to Turnbull has an enterprise value/EBITDA multiple of 5.40.

What is the enterprise value of Turnbull Corp.? Round to the nearest million dollars.

23. Jockey Company has total assets worth $4,417,665. At year-end it will have net income of $2,771,342 and pay out 60 percent as dividends. If the firm wants no external financing, what is the growth rate it can support?

24. Which of the following cannot be engaged in managing the business?

25. Which of the following does maximizing shareholder wealth not usually account for?

28. Drekker, Inc., has revenues of $312,766, costs of $220,222, interest payment of $31,477, and a tax rate of 34 percent. It paid dividends of $34,125 to shareholders. Find the firm's dividend payout ratio and retention ratio.

29. The cash conversion cycle

30. You are provided the following working capital information for the Ridge Company:

Ridge Company

Account $

Inventory $12,890

Accounts receivable 12,800

Accounts payable 12,670

Net sales $124,589

Cost of goods sold 99,630

Cash conversion cycle: What is the cash conversion cycle for Ridge Company?

Questions:

1 Under the Anti-Cybersquatting Consumer Protection Act, which of the following is true?

Penalties are imposed for obtaining any domain name that infringes on a valid trademark.Domain

names are granted only after ensuring that they do not infringe on a valid existing trademark.

A plaintiff must show that the defendant acted in bad faith in order to recover.

Prior approval by the affected celebrity is needed to obtain a domain name that is similar to a celebrity’s name.

2 The Hart-Scott-Rodino Antitrust Improvement Act led to rules requiring:

That mergers be allowed if United States competitiveness in world markets is improved.

That failing companies are rescued through mergers whenever possible.

That the Federal Trade Commission and the Justice Department be notified in advance of any merger involving certain firms.

That certain activities are classified as per se violations.

3 The landlord has the right to enter the leased premises:

To make necessary repairs

Only if specifically provided in the lease

To inspect for waste

To inspect for illegal use

4 Which for of real property ownership includes the greatest degree of ownership?

Fee simple defeasible

Fee simple limitless

Absolute life estate

Fee simple absolute

5 A doctrine that says a patent may not be granted if the invention was used by the public for more than a certain period of time prior to the filing of the patent application is known as;

The public use doctrine

The fair use doctrine

The bar to patents doctrine

The public service doctrine

6 This form of alternative dispute resolution allows both parties to see the strengths and weaknesses of both sides of the case.

Mini-trial

Fact-finding

Judicial referee

Conciliation

7 Which of the following is a distinguishing feature of a common law legal system?

The making of law by the judges and the following of precedent

Requiring guilt be proven beyond a reasonable doubt

An appeal process

The sole source of law is a comprehensive civil code

8 The Sarbanes-Oxley Act was enacted as the result of:

The failure of the savings and loans in the 1980s.

The high profile accounting fraud cases in the 1990s and early 2000s.

The terrorist attacks of Sept 11, 2001.

The collapse of the housing market in the late 2000s.

9 Which of the following is true about sexual harassment in the workplace?

Sexual harassment claims require that persons of both genders be involved.

If a supervisor approaches someone and asks the person out for a social date, and if the supervisor acts in a socially customary manner, it will not be sexual harassment.

Sexual harassment is covered under OSHA as part of workplace safety.

The standards for a hostile work environment are extremely vague and depend on all the facts and circumstances.

10 Which form of alternative dispute resolution occurs when the parties choose an impartial third party to hear and decide their dispute?

Arbitration

Minitrial

Mediation

Conciliation

11 According to Sarbanes-Oxley, this person or people should sign the Federal income tax return of a corporation:

Board of Directors

Chief Executive Officer

Head of the accounting firm that prepares the corporation’s tax returns.

Chief Executive Officer and Chief Financial Officer

12 Edward’s Warehouse stores a variety of generic goods for several distributors in Anytown. Which of the following describes Edward’s liability for the bailed goods should something happen to them?

Comparative liability.

Criminal liability.

Ordinary negligence

Strict liability.

13 The tort of palming off involves:

Making false statements about the goods of another

Failing to credit another for that other person’s legal accomplishments

Representing one’s own goods to be those of a competitor

Knowingly selling goods that are defective.

14 If an LLC fails to follow formalities such as keeping minutes of meetings, then which of the following is true?

Only the managers of a manager-managed LLC will lose limited liability.

This failure will not result in imposing personal liability on any member.

All members will lose their limited liability.

Only the parties responsible for the failure will lose limited liability.

15 If a plaintiff voluntarily enters into or participates into a risk activity that results in injury, what is the most likely defense that he or she may use to a defendant’s claim that the plaintiff assumed the risk?

Defendant assumed the risk under the “danger invites rescue” doctrine

Comparative negligence

Defendant was negligent per se

Contributory negligence

16 Barry buys a new sports car. The car sits low to the ground and because of the styling visibility to the rear is limited. About a month after Barry buys the car, he backs over his pet poodle as he is leaving for work. In his strict liability suit against the car manufacturer, Barry will:

Win on the basis of design defect

Lose because he assumed the risk of backing up in a car when he could not see to the rear.

Win because driving a sports car is an inherently dangerous activity

Win on the basis of packaging defect because the car could have been packaged in a differently styled body.

17 If there is an area of interstate commerce that the federal government has not chosen to regulate, the states can:

Not regulate in that area because states cannot pass laws affecting interstate commerce.

Regulate without restriction in that area.

Regulate in that area so long as the state law does not undulyburden interstate commerce.

Regulate in that area so long as it first gets the requisite approval from Congress.

18 The legal effect of the presence of a superseding event is that:

The burden of proof shifts from the plaintiff to the defendant

Intent must be proven in addition to elements of negligence

The plaintiff and defendant will share liability

The defendant is not liable even if the plaintiff has proved all the elements of negligence.

19 John is president and sole shareholder of Photo, Inc. Photo, Inc. wishes to borrow money, but to do so, the bank requires John to orally guarantee to repay the loan if Photo, Inc. cannot. John’s guaranty to repay is:

Enforceable, because the main purpose of the loan and the guarantee was to benefit John.

Unenforceable, because in general, guaranty contracts need to be in writing.

Unenforceable, because John did not sign any agreement.

Enforceable, because in general, guaranty contracts do not need to be in writing.

20 The major disadvantage of a sole proprietorship is:

The unlimited liability for the business’ debts.

The difficulty in transferring ownership to others.

The sharing of management authority with others.

The difficulty and cost of formation.

21 Sam sells property to Betty and delivers Betty a deed that says"This property is conveyed to Betty so long as she never operates a bar on the premises.” If she operates a bar on the premises, Sam Seller may take possession of the property. The type of interest that Betty Buyer has acquired is a:

Fee simple absolute

Fee simple defeasible

Fee simple remainder

Fee simple limited

22________ is a form of alternative dispute resolution that is often used when the parties involved do not want to face one another.

Fact-finding

Negotiation

Mini-trial

Conciliation

23 Which of the following statutes provides that it is legal for employees to organize a union?

The Worker Adjustment and Retraining Notification Act

The Labor-Management Relations Act

The Norris-LaGuardia Act

The National Labor Relations Act

24 Which of the following is true when someone accidentally makes an improvement to the personal property of another where the owner was unaware of the improvement until after ithad been made?

The party who made the improvement can remove it if this is possible, otherwise the owner of the property gets to keep the improvement and must pay the party who improved it the reasonable value of the improvement.

The property owner gets to keep the improvement in all circumstances and is not required to pay for it.

The party who made the improvement can remove it if this is possible, otherwise the owner of the property gets to keep the improvement and is not required to pay for it.

The property owner gets to keep the improvement in all cases, but must pay the party who improved it the reasonable value of the improvement.

25 Which is true about the two kinds of discrimination that are actionable under Title VII?

Disparate impact and disparate treatment are both based on how the employer treats a specific individual.

Disparate impact and disparate treatment are both based on how the employer treats a protected class.

26 Sean has a 6 year old car which he bought 2 years ago from its original owner. Eight months ago he received a recall notice about a safety problem with the brakes. He never responded to the notice. Yesterday Sean was driving when the brakes failed and caused him to strike and injure a pedestrian. Which of the following is true in lawsuits against the car’s manufacturer?

Neither party can recover if Sean’s was one of only a few of these cars that actually had a brake defect.

Sean can recover despite having received the recall notice.

The pedestrian cannot recover due to the fact that the pedestrian was not using the car.

The pedestrian cannot recover because the correction of the defect will apply even though Sean did not take the car in for repairs.

27 unfair and deceptive trade practices are general regulated by the:

Federal Trade Commission

Consumer Product Safety Commission

Food and Drug Administration

Securities and Exchange Commission

28 What are sellers responsible to provide for regarding the assembly of products they sell?

Adequate instructions for safe assembly

Adequate instructions for safe assembly and use of the product.

Rebates

Adequate instructions for use of the product

29 George, an employee, breaches a fixed-term employment contract by quitting before the end of the term. What can his employer, MNO Inc. recover as damages?

All amounts already paid to the employee under the contract.

The costs of hiring a replacement employee plus any increase in salary paid to the replacement employee.

Only amounts paid to the employee for which the employee has not yet done the work.

Nothing, because courts do not order anyone to perform a job against his or her will.

30 Mary, the seller, and Jane contract for the sale of 500 sweaters.They agree on color and style, but not on price or time of delivery. Mary refuses to deliver the sweaters and Jane sues. What results?

Jane wins; the courts will fill in all the above-mentioned missing terms.

Mary wins; the courts will fill in many missing terms, but never price.

Mary wins; because all these terms were omitted from the agreement, the contract is not definite enough to be valid.

Mary wins; the courts will fill in many missing terms, but never time of delivery.

The offer to complete the performance of contractual duties made by a party who is willing and able to perform.

A party’s unequivocal indication of intent to perform.

The actual completion of a party’s obligations under the contract.

32 If a judge rules that a party lost its case because of the Statute of Frauds, the judge has essentially stated which of the following?

The losing party cannot enforce an oral contract that should have been in writing.

The losing party was found by the court to have lied, and therefore will lose the case.

The losing party will not be allowed to introduce evidence to contradict a written agreement.

The losing party purposely deceived the other party about a material fact.

33 Paul purchased a deluxe motorhome from Wide Open Spaces Motorhomes. In a product liability suit against Wide Open Spaces Motorhome Corporation, Paul must show which of the following in order to recover:

The negligence of Wide Open Spaces led to Paul’s injury

A defect made the motorhome unreasonably dangerous, leading to an injury.

Wide Open Spaces was the manufacturer of the motor home and not just a dealer.

Paul was not misusing the motorhome when the injury occurred.

34 Officers of a corporation typically have which types of agency authority?

Implied and apparent only

Express only

Express, implied, and apparent

Express and apparent only

35 The school of jurisprudence that believes that free market forces should determine the outcome to lawsuits is:

The Sociological school

The Command school

The Law and Economics school

The Critical Legal Studies school

36 Which of the following is true about the provisions of the Consolidated Omnibus Budget Reconciliation Act (COBRA) as they related to health insurance?

Employers must make the same group health insurance available to all employees.

Upon termination of employment, a health insurance provider must allow the employee to participate in the same health insurance coverage program that the employee participated in while working for the employer, although the employee must pay for it.

Certain companies are required to provide group health insurance coverage to their employees.

Upon termination of employment, an employer is required to pay, for a limited time, for the former employee’s health insurance coverage under the same terms that it had been paying for it while the employee worked for the employer.

37 Which of the following is true about litigating commercial disputes?

The Sociological school

The Law and Economics school

The Critical Legal Studies school

The Command school

38 Mr Smith awakens one morning to the sound of construction in his backyard. When he looks out the window, he sees Ajax Construction Co. apparently erecting a garage on his property. He had not spoken or contracted with Ajax for this service. However, Mr Smith really wanted a new garage, so he let them continue. Later it was discovered that the garage was intended to go next door. Ajax sues Mr Smith for the value of the garage. What is the probable result?

Ajax wins; although there is no real contract, this is a case of unjust enrichment, and because Mr Smith accepted the garage, he must pay for it.

Smith wins; there was no contract upon which Ajax could recover, and people are not liable for benefits that are thrustupon them.

Smith wins; unjust enrichment does not apply here becauseMr Smith had no duty to tell Ajax that it had the wrong house.

Ajax wins; this is a case of a contract implied in-fact, andMr Smith implicity agreed to pay for the garage.

39 Martha started a flower shop as a sole proprietor. After 1 year, she was forced to close the shop because business was so bad. At that time, the business assets totaled $50,000, but the business liabilities totaled $125,000. Which of the following statements is true:

Martha’s business creditors can collect only the $50,000 now, but if Martha ever goes into business again, they can get the assets of the new business.

Once Martha terminates the sole proprietorship, the business creditors cannot even get the $50,000.

Martha’s business creditors can collect only the $50,000 of business assets.

Martha is personally liable for the additional $75,000.

40 Under what circumstances can a state impose a tax on goods imported from other nations?

If the amount of the tax is reasonable

If the tax does not conflict with any valid federal law

If the tax also applied equally to the same type(s) of goods produced domestically

Under no circumstances

41 Under the Employee Retirement Income Security Act (ERISA), an employee’s benefits must vest:

Only as provided in the pension plan.

Within 10 years

By the time of the employee’s retirement

In total within 5 years or gradually within 7 years

42 Which of the following is likely to be a breach of a corporateofficer’s/director’s duty of care?

Failing to predict the startup of a new competitor.

Failing to anticipate a drop in consumer demand of the company’s product.

Failing to foresee a severe rise in the interest rate.

Failing to make a reasonable investigation of relevant facts.

43 Mark is the treasurer of Sky-Hi Tech Corporation and, as such, he is responsible for protecting the assets of the corporation. One of Mark’s subordinates, Jill, is in charge of reconciling the monthly corporate bank statements. Over a period of several months, Jill embezzled a large amount of money from Sky-Hi Tech, covering up the theft using her bank reconciliations. If Mark had adequately supervised Jill, she could not have embezzled this money. Mark’s actions (or inactions) constitute a breach of his duty of:

Obedience

Loyalty

Due care

Ultra vires

44 In a guaranty arragement, the guarantor:

Promises to pay the debt of another in any circumstances.

Promises to assume responsibility for the quality of goods.

Promises to pay the debt of another if that person does not pay.

Promises to pay the debt of another contingent up the happening of some external event.

45 Janet is manager of a bank. She has all the qualifications to be promoted to bank manager. In fact, she is better qualified than any of the males being considered for the position. However, the owner of the bank believes that bank customers will not accept a woman as bank manager, so the owner promotes one of the males. The owner’s actions would best be described as:

46 Which of the following is true about misappropriation of trade secrets?

47 Internet domain names are assigned by:

48 What is the major convention that provides international protection to patents?

49 The Sarbane-Oxley Act of 2002 was enacted in order to:

50 George, an employee, breaches a fixed-term employment contract by quitting before the end

51 Which of the following statements best describes the procedures under the Clean Air Act?

Which of the following financial statements is concerned with the company at a point in time?

2

A cost which remains constant per unit at various levels of activity is a:

3

M&M Proposition 1: Dynamo Corp. produces annual cash flows of $150 and is expected to exist forever. The company is currently financed with 75 percent equity and 25 percent debt. Your analysis tells you that the appropriate discount rates are 10 percent for the cash flows, and 7 percent for the debt. You currently own 10 percent of the stock.

If Dynamo wishes to change its capital structure from 75 percent equity to 60 percent equity and use the debt proceeds to pay a special dividend to shareholders, how much debt should they use?

4

Serox stock was selling for $20 two years ago. The stock sold for $25 one year ago, and it is currently selling for $28. Serox pays a $1.10 dividend per year. What was the rate of return for owning Serox in the most recent year? (Round to the nearest percent.)

5

The process of evaluating financial data that change under alternative courses of action is called:

6

What decision criteria should managers use in selecting projects when there is not enough capital to invest in all available positive NPV projects?

7

The convention of consistency refers to consistent use of accounting principles:

8

External financing needed: Jockey Company has total assets worth $4,417,665. At year-end it will have net income of $2,771,342 and pay out 60 percent as dividends. If the firm wants no external financing, what is the growth rate it can support?

9

Which of the following is considered a hybrid organizational form?

10

An activity that has a direct cause-effect relationship with the resources consumed is a(n):

11

Next year Jenkins Traders will pay a dividend of $3.00. It expects to increase its dividend by $0.25 in each of the following three years. If their required rate of return if 14 percent, what is the present value of their dividends over the next four years?

12

TuleTime Comics is considering a new show that will generate annual cash flows of $100,000 into the infinite future. If the initial outlay for such a production is $1,500,000 and the appropriate discount rate is 6 percent for the cash flows, then what is the profitability index for the project?

13

Your firm has an equity multiplier of 2.47. What is the debt-to-equity ratio?

14

If a company’s weighted average cost of capital is less than the required return on equity, then the firm:

15

When a company assigns the costs of direct materials, direct labor, and both variable and fixed manufacturing overhead to products, that company is using:

16

The major element in budgetary control is:

17

Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time:

18

Which of the following is an advantage of corporations relative to partnerships and sole proprietorships?

19

The break-even point is where:

20

Turnbull Corp. had an EBIT of $247 million in the last fiscal year. Its depreciation and amortization expenses amounted to $84 million. The firm has 135 million shares outstanding and a share price of $12.80. A competing firm that is very similar to Turnbull has an enterprise value/EBITDA multiple of 5.40.

What is the enterprise value of Turnbull Corp.? Round to the nearest million dollars.

21

Which of the following is considered a hybrid organizational form?

22

The most important information needed to determine if companies can pay their current obligations is the:

23

Gateway, Corp. has an inventory turnover of 5.6. What is the firm’s days’s sales in inventory?

24

Horizontal analysis is also known as:

25

Which of the following presents a summary of changes in a firm’s balance sheet from the beginning of an accounting period to the end of that accounting period?

26

Ajax Corp. is expecting the following cash flows - $79,000, $112,000, $164,000, $84,000, and $242,000 – over the next five years. If the company’s opportunity cost is 15 percent, what is the present value of these cash flows? (Round to the nearest dollar.)

27

Bond price: Regatta, Inc., has six-year bonds outstanding that pay a 8.25 percent coupon rate. Investors buying the bond today can expect to earn a yield to maturity of 6.875 percent. What should the company's bonds be priced at today? Assume annual coupon payments. (Round to the nearest dollar.)

28

Process costing is used when:

29

Jack Robbins is saving for a new car. He needs to have $21,000 for the car in three years. How much will he have to invest today in an account paying 8 percent annually to achieve his target? (Round to nearest dollar)

30

The accumulation of accounting data on the basis of the individual manager who has the authority to make day-to-day decisions about activities in an area is called:

31

Variance reports are:

32

The cash conversion cycle?

33

In a process cost system, product costs are summarized:

34

Internal reports that review the actual impact of decisions are prepared by:

35

How firms estimate their cost of capital: The WACC for a firm is 13.00 percent. You know that the firm’s cost of debt capital is 10 percent and the cost of equity capital is 20% What proportion of the firm is financed with debt?

36

The group of users of accounting information charged with achieving the goals of the business is its:

37

An unrealistic budget is more likely to result when it:

38

Jayadev Athreya has started his first job. He will invest $5,000 at the end of each year for the next 45 years in a fund that will earn a return of 10 percent. How much will Jayadev have at the end of 45 years?

Teakap, Inc. has current assets of $1,456,312 and total assets of $4,812,369 for the year ending September 30, 2006. It also has current liabilities of $1,041,012, common equity of $1,500,000 and retained earnings of $1,468,347. How much long-term debt does the firm have?

The marketing manager needs to know the cost of the research project before approving it. During which stage of the marketing research process would such a consideration most likely take place?

4

A valuable result of task environment analysis with respect to geographic, demographic, psychographic and buyer-behavior factors is called

5

New-to-the-world products are ________.

6

These social responsibilities are those that are voluntarily assumed by a business or organization. They include public relations activities, good citizenship, and full corporate social responsibility.

7

When diversification involves additions of a business related to the firm in terms of technology, markets or products, it involves

8

Which component of a marketing audit includes major developments in income, prices, savings, and credit that affect the company?

9

The ability to meet humanity’s needs without harming future generations is now a top priority in most corporate agenda

10

BMW's "The ultimate driving machine," American Express' "Don't leave home without it," New York Times' "All the news that's fit to print," and AT&T's "Reach out and touch someone" are all examples of ________.

11

A company can learn a great deal by analyzing the degrees of brand loyalty. For example, ________ can show the firm which brands are most competitive with its own.

12

The strategic factor that involves the beliefs, values, attitudes, opinions, and lifestyles of persons in the firm’s external environment, as developed from cultural, ecological, demographic, religious, educational, and ethnic conditioning.

13

A set of ideas on organizational control based on the belief that the separation of the ownership from management creates the potential for the wishes of owners to be ignored refers to

14

This is designed to check systematically and continuously whether the premises on which the strategy is based are still valid

15

When performing this analysis, it is good for strategic planners to consider similarities between the benefits the customers derive from the products and services that other firms offer.

16

This is a historically popular technique through which managers create a quick overview of a company's strategic situation—it is based on achieving a sound fit between internal resources and the external situation.

17

A company that attempts to lead its industry in price and convenience by pursuing a focus on lean and efficient operations is pursuing what strategy?

18

Leaders galvanize commitment to embrace change through clarifying strategic intent, building an organization, and

19

Prestige LLC, a small company that manufactures specialty cereals and energy bars, wants to launch a "green marketing" program in response to heightened consumer awareness about environmental issues. What should the company do to maximize the program's chances of being successful?

20

This is an important structural decision and resultant separate activities need to be coordinated and integrated back together as a whole so the business functions effectively.

21

Company X's principal strength is its inbound and outbound logistics system; its relative weakness, however, is after-sales service. Its competitor, Company Y, however is often plagued with lagging shipments and an inflexible distribution setup. Company Y remains successful because it maintains a fully staffed service department and, as a result, the company is known for its dependable service. This type of analysis allows them to identify ways to build on relative strengths and avoid dependence on capabilities at which the other firm excels.

22

With ________ as a target market strategy, the firm concentrates on serving many needs of a particular customer group.

23

How do functional tactics compare to business strategies?

24

Under which of the following conditions is the frequency the most important factor in media selection?

25

What is the perceived monetary value of the bundle of economic, functional, and psychological benefits customers expect from a given market offering because of the product, service, people, and image?

26

Which control should periodically reassess its approach to the marketplace with a good marketing audit?

27

One of the ways to change the course of a brand is to modify the product. Under product modification, ________ adds size, weight, materials, supplements, and accessories that expand the product’s performance, versatility, safety, or convenience.

28

Firms using this generic strategy attempt to build customer loyalty by stressing a specific product attribute above other product qualities.

29

Large-scale, future-oriented plans for interacting with the competitive environment to achieve the company objective refers to its

30

Marketers need to identify the hierarchy of attributes that guide consumer decision making in order to understand different competitive forces and how these various sets get formed. This process of identifying the hierarchy is called ________

1.The concept that some leadership attributes will work in some situations but not in others can be described by the

behavioral theory

leadership effectiveness theory

tactical theory

contingency theory

2.Sam Meyers manages a telemarketing call center. He has 20 employees working for him who are displeased with the way he yells and threatens to terminate them for what they see as small issues. Which kind of power is Sam using to get the job done?

Referent power

Reward power

Coercive power

Legitimate power

3.Which of the following is considered an organizational blueprint, which prescribes the quantity and time frame for when each end product will be assembled?

WBS (Work Breakdown Structure)

ERP (Enterprise Resource Planning)

MRP (Material Requirements Plan)

MPS (Master Production Schedule)

4.In performing a SWOT analysis, which of the following would be considered as a threat?

Competitors

Lack of a strategic plan

Increased product demand

Recognized brand

5. During the implementation of a project, which of the following should be the primary focus of a consulting firm?

·

The correct project software

·

Application of the learning curve theory

·

Tools and materials availability

·

People management skills

6.Which of the following is considered a major process flow structure?

Fabrication

Lead Time

Project

Lean Manufacturing

7. Some studies indicate the best approach for transformational change may have the chief executive officer create an atmosphere for change

9. What can affirmative action assist organizations in achieving that diversity initiatives cannot?

Correcting specific problems of the past

Increased productivity

Maximizing creativity

Maximizing workforce commitment

10. According to the job characteristics model, autonomy is defined as the degree to which

a job generates direct and clear information about performance

a job provides the worker freedom, independence, and discretion

a job has an impact on the lives or work of other people

a job requires completion of a whole and identifiable piece of work

11. Active listening requires:

interruptions to get your point across

summarizing all areas of the performance-interview feedback discussion.

summarizing only the areas of agreement

verbal communications only

12. An example of control criteria that can be used in any situation is ________.

number of calls taken per day

employee satisfaction

client requests completed per hour

average time to process paperwork

13. Because practical considerations make job tryouts for all candidates infeasible, it is necessary to __________ the relative level of job performance for each candidate on the basis of available information.

assign

abandon

predict

accept

14. Which of the following is ISO 14000 primarily concerned with?

Time management

Continuous improvement management

Environmental management

Quality management

15. Which of the following is a desirable strategy for managers aiming to reduce the negative consequences of rumors?

Creating a more informal communication environment at the workplace

Initiating disciplinary action against the employee who started the rumor

Encouraging employees to communicate their concerns and suggestions

Refusing to comment on issues that appear to be controversial and unfair

16. ________ refers to an individual’s belief that he or she is capable of performing a task.

Self-efficacy

Emotional contagion

Affect intensity

Self-determination

17. When an employee volunteers to run a canned food drive, this is an example of

organizational citizenship behavior

employee productivity

job satisfaction

employee happiness

18. As a university student, your institution’s social principles and practices reflect on you, as a stakeholder, in the organization. Therefore, it is your right to question how these practices should be evaluated in relation to the social issues that the school is addressing. If your university provides job-share programs, builds a day-care facility, and only uses recycled paper, it could be said to be ________.

socially image conscious

fulfilling its social obligation

socially aware

socially responsive

19. A project can be segmented into which of the following?

Events

Success markers

Work packages

Sub-jobs

20. In order to make their firm a learning organization, managers should

increase the degree of departmentalization

reinforce interdependence and reduce boundaries

penalize mistakes

avoid the use of cross-functional teams

21. Conflicts can be resolved by withdrawing from them or suppressing them. This conflict-management technique is known as ________.

accommodating

forcing

avoiding

compromising

22. Adoration of a charismatic leader by followers can lead to

limiting suggestions of fixes and improvements

a competitive work environment

greater understanding of the company mission

difficulty in developing a successor

23. Which of the following statements is true with regard to the effectiveness of tactics?

All tactics are equally effective with regard to upward influence.

Individuals from collectivist cultures are typically more likely to use soft tactics that reflect personal power.

The combination of a soft tactic with reasonable persuasion is more effective than a combination of two hard tactics.

Soft tactics are less effective than hard tactics when used individually

24. ____________ is the biggest hurdle to overcome in a pay-for-performance plan.

Merit-pay increases

Compensation equation

Inflation

Salary cap performance level

25. Mary arrives at her new job. Before she can begin actually doing the work, she must complete a series of activities including role playing and virtual reality interactions. What type of training method does Mary’s new employer use?

On-the-job training

Information presentation

Simulation

Organizational development

26. In _____, workers have been fired for refusing to quit smoking, for living with someone without being married, drinking a competitor’s product, motorcycling, and other legal activities outside of work.

lifestyle discrimination

invasion of privacy

defamation

constructive discharge

27. Which of the following is one of Dr. Eli Goldratt's rules of production scheduling for optimized production technology?

If you lose an hour at a bottleneck it is better than making scrap.

Do not allow bottlenecks to govern the flow of the line.

Utilization and activation of a resource are not the same.

An hour saved at a bottleneck operation does not increase the process flow.

28. The Civil Rights Act of 1991 offered what for victims of unintentional discrimination?

race norming

adverse impact

affirmative action

monetary damages and jury trials

29. Which of the following is an element that addresses elimination of waste under lean production?

Minimized run times

Production ahead of demand

Group plant loading technology

Kanban production control system

30. Training that results in ______ is costly because of the cost of training (which proved to be useless) and the cost of hampered performance.

1. What is the approximate forecast for May using a four-month moving average?

2. Jim's department at a local department store has tracked the sales of a product over the last 10 weeks exponential smoothing with an alpha of 0.3. In January he forecasted $150,000 in sales and achieved $155,000 is sales. Using this same forecasting model, estimate Jim's February sales.

3. The Clothes Factory wants to increase capacity by adding a new sewing machine. The fixed costs for machine A are $2,000, and its variable cost is $3 per unit. The revenue is $5 per unit. The break-even point for the sewing machine is _____.

4. A full-service restaurant is considering opening a new facility in a specific city. The table below shows its ratings of four factors at each of two potential sites. Using the factory rating method, the score for Wind City is _____ and the score for State Line is ______.

5. The Merry Baking Company bakes 400 sheet pans of cookies during the two eight-hour shifts they run each day. They recently installed a couple of larger ovens. The new ovens have enabled Merry Baking to increase their productivity by 15%. The productivity of Merry Baking is now approximately _____.

6. A fleet repair facility has a design capacity to repair 800 trucks per month. However, due to scheduled maintenance of their equipment, management feels that they can repair no more than 600 trucks per month. Last month, two of the employees were absent several days each, and only 600 trucks were repaired. What is the utilization of the repair shop last month?

PAGE 2

1. The second step in building a house of quality is to _____.

2. A product's life cycle is divided into four stages, which are _____.

3. Which of the following helps operations managers focus on the critical few and not the trivial many?

4. A forecast with a time horizon of about three months to three years is typically called a _____.

5. Four types of process strategies are _____.

6. Breakeven is the number of units at which _____.

7. A system using an automated work cell controlled by electronic signals from a common centralized computer facility is called a(n) _____.

8. Service blueprinting _____.

9. Which of the following is not a current trend in operations management?

10. Which of the following has not been a key driver to the globalization of business?

11. A strategy is _____.

12. Which of the following is not an operations strategy?

13. According to the authors, what are the three key strategic concepts that allow firms to achieve their missions?

14. Acceptance sampling _____.

15. Manufacturing cycle time is best defined as the _____.

PAGE 3

1. A fishbone diagram is also known as a(n)?

2. JIT inventory tactics can be encouraged through use of _____.

3. An engineering drawing _____.

4. Which of the following terms refers to the use of specialized computer programs to direct and control manufacturing equipment?

5. The product design technique that can be produced to requirement even with unfavorable conditions in the production process is?

6. The objective of a human resource strategy is to _____.

7. Activity charts help analyze _____.

8. In the make-or-buy decision, one of the reasons for buying is _____.

9. A focused factory _____.

10. The three stages of vendor selection, in order, are _____.

11. Which of the following best describes vertical integration?

12. Forward scheduling is the scheduling of?

13. Which of the following aggregate planning strategies is a "capacity option?"

14. The objective of maintenance and reliability is to

15. Infant mortality refers to which one of the following examples?

PAGE 4

1. Explain the concepts of the product life cycle and identify the four phases of the product development cycle. Now, explain how your operations strategy changes for each phase of the product life cycle. Please be sure to use a unique example and apply it to each phase.

2. Define the linkage between a firm’s mission, operations strategy, core competencies, and key success factors. Please define each term and then provide an example on how they would link .

3.

1. What is a SWOT analysis?
2. How does this concept relate to strategy and mission? (10 Points)
3. Please pick a product and perform a SWOT analysis on that product demonstrating your knowledge of and ability to apply this learning in performing a SWOT analysis. (15 Points) (Points : 30)

1. (TCOs 2, 3, and 5) As we know, Congress devised a very broad definition of income and codified this definition in Section 61 of the Internal Revenue Code. Explain the Code's definition of income and how it
is generally applied to taxpayers. In particular, explain how the Code's definition of income is different than other potential definitions of income, such as the economic concept of income, and use an example to illustrate the difference between the two systems. Explain how the Code approaches whether or not particular items should be included in income and how a taxpayer's taxable income is generally determined under the Code. (Points : 25)

2. (TCOs 2, 4, and 5) We spent quite a bit of time this term learning about deductions. One of the important distinctions between various types of deductions that we examined was the distinction between
"for AGI" and "from AGI" deductions. Explain how the names for these two types of deductions developed, as well as the fundamental differences between the two types of deductions and the general types of
deductions that fall within each category. In particular, focus on the different tax consequences that each might have, any applicable limitations, and the significance of being classified as a from AGI deduction instead of for AGI. (Points : 25)

3. (TCOs 2, 5, 6, and 7) As a tax practitioner, you often get people asking questions concerning the tax effect of property transactions. This year is no exception. You've had individual clients ask you the following questions this year:

I. I inherited property from my grandfather, and I received a gift of property from another family member. How do I determine the basis in each piece of property?

II. I bought a piece of property that is used in a trade or business. Are there any tax deductions associated with this purchase of property? If so, how do I determine the amount of those deductions?

Answer each of these questions, explaining the applicable rules and possibilities of each. (Points : 50)

4. (TCOs 2, 3, and 4) One of your corporate clients has approached you about whether or not its employees are required to include certain benefits provided by the corporation in their
income. In particular, the corporation has inquired whether the following benefits provided by the corporation to employees would be included in an employee's taxable income:

5. (TCOs 1, 2, 8, 9, and 10) One of your best individual clients is thinking about starting up a new business, and he is seeking your advice on which business form he should select. In particular, he's trying to decide whether to operate the business as a partnership or a C corporation. Explain to him the significant tax and nontax issues that will arise from choosing each of these entities compared to the other, including how
income will be treated by the entity, the overall tax burden, and the effect of distributions of property or earnings from the entity to your client. (Note: Do not spend time addressing other types of business entities. Credit will only be given for discussion of the two business entities at issue.) (Points : 50)

6. (TCO 2, 3, 6, 8, 9, and 10) You are chief counsel to the chairman of the Joint Committee on Taxation, the body primarily responsible for identifying taxation issues and their consequences as Congress seeks to implement a comprehensive and coherent tax
policy. Currently, the United States is in a bit of an economic slump. Corporate earnings reports are relatively weak; the stock market is about 25% off of its five-year highs, and tax revenues are down. Largely as a result of the last issue, the government finds itself operating under an annual deficit, and the national debt hovers around $7,000,000,000. Interest rates, however, remain at historic lows. The president has suggested a multiple-pronged attack
to revitalize the economy. First, he has proposed going to a flat tax rather than the current progressive tax system. (No recommendation regarding what that flat tax rate should be has been made, although the president has indicated he would not be likely to accept any figure above 15%.) As part of this plan, however, the president has proposed eliminating many of the current individual income tax deductions, including

(I) the home mortgage interest deduction and

(II) the property tax deduction. He has also proposed eliminating the deduction for dependents. Furthermore, he has proposed eliminating the child care and earned income credits to help make up for any potential shortfalls in revenue.

7. (TCO 1, 2, 3, 4, 8, and 10) As a newly minted CPA, you obtain your first significant position as a tax professional: senior tax accountant for one of the offices of a regional accounting firm. Of course, the firm runs a notice of your hiring in the local newspaper. A few days later, the editor of the newspaper calls you and asks if you might be interested in writing a monthly column for the newspaper on tax issues. Figuring that it would be a good way to get your name out in the community as an expert in the field (and a little free advertising to boot!),
you tell him that you would be more than happy to do so. "Great! " he says. "By the way, I have already blocked out space for this column in the next edition of the paper. Is there any way that you can get me your article by the end of the day today?" After you commit to doing so, he also proceeds to tell you that you will not be paid for these articles. "I figure that
it is just a sort of public service that you could offer to the community. I am sure you understand." (And so it begins.... Get used to a lot of this.) You spend the next 10 minutes thinking about what you could discuss in your first article. You would like to shake people up a little bit, and perhaps challenge their opinions about some issues of tax law. That way, you could perhaps build up some interest in your column, which, as you know, will be difficult to achieve under the best of circumstances! (After all, who wants to read newspaper articles about taxes?)

2. In addition to the balance sheet, the income statement, and the statement of cash flows, a complete set of financial statements must include

3. The income statement summarizes

4. Denver Dynamics has a net income of $2,000,000. Oakland Enterprises has a net income of $2,500,000. Which of the following best compares the profitability of Denver to Oakland?

5. Which of the following is a false statement, as it relates to analysis?

6. Other than December, the most popular month for a fiscal year end is

7. Who is responsible for the preparation and the integrity of financial statements?

8. Which of the following is not a type of audit opinion?

9. The two primary qualities that make accounting information useful for decision-making are

10. Which of the following statements best compares long-term borrowing capacity ratios?

11. The debt ratio is calculated as

12. The debt ratio indicates

13. Which of the following is included in operating income?

14. Which of the following is classified as an extraordinary item on the income statement?

15. What significant improvement in the financial reporting of pensions have pension accounting rules provided?

16. The following relate to Data Original in 2006. What is the ending inventory?

Purchases: $540,000

Beginning Inventory: 80,000

Purchase Returns: 10,000

Sales: 800,000

Cost of Goods Sold: 490,000

17. Extraordinary items should be eliminated in the analysis of income because

18. Which of the following types of business would normally have the longest operating cycle?

19. Which of the following is considered the most indicative of a firm's short-term debt paying ability?

20. A low working capital turnover ratio indicates

21. Investments classified as marketable securities should be

22. For cash to be classified as a current asset, it must be

23. If a firm pledges its receivables and its inventory, then the best indicator of its short-term liquidity may be indicated by

24. Which of the following is not classified as a current asset?

25. Which of the following current assets will not generate cash in the future?

26. The following requires separate earnings per share disclosure

27. Stock appreciation rights can have a material impact on

28. A firm might have a low dividend payout ratio if it plans

29. In computing earnings per share, preferred dividends are subtracted from

30. Using financial leverage is a good financial strategy from the viewpoint of stockholders of companies having

31. The best dividend payout ratio

32. Which of the following is typically considered the most indicative of a firm's short-term debt paying ability?

33. When performing year to year change analysis you should remember that

PAGE 2

1. Szabo Company computed the following data for 2003:

Days' sales in receivables: 38.7 days

Accounts receivable turnover: 9.6 times

Accounts receivable turnover in days: 33.1 days

Days' sales in inventory: 68.5 days

Merchandise inventory turnover: 5.9 times

Inventory turnover in days: 58.7 days.

The estimated operating cycle for 2003 is:

2. Smith Company presents the following data for 2006.

Inventories, beginning of year: $310,150

Inventories, end of year: $340,469

Cost of goods sold: $2,103,696

Net sales: $8,690,150

The number of days' sales in inventory is:

3. The following data were gathered from the annual report of Desk Products.

Market price per share $30.00

Number of common shares 10,000

Preferred stock 5%

$100 per $10,000

Common equity $140,000

The book value per share is:

4. Execon Company had total assets of $200,000, total liabilities of $110,000, and shareholders' equity of
$90,000 at the beginning of the year. For the year, Execon Company earned net income of $75,000 and declared cash dividends of $30,000. At the end of the year, the company had total assets of $300,000 and its shareholders' equity was
at $135,000. At the end of the year, Execon Corporation had total liabilities of:

3 What percentage of neural tube defects is related to the mother's intake of folate before and during pregnancy?

4 The type of eating disorder characterized by episodes of binging and purging is?

5 Which of the following eating disorders is the most common among men?

6 Which of the following BEST describes why the body reduces nonvital body functions in untreated anorexia nervosa?

7 How do antioxidant vitamins stabilize free radicals?

8 Which of the following is NOT considered an essential nutrient?

9 Which water-soluble vitamin can regenerate Vitamin E after it has been oxidized?

10 In addition to proper growth and development, bone remodeling is critical in maintaining?

11 Where does the body store selenium?

12 Which of the following nutrients increases the absorption rate of calcium?

13 The most common form of cancer in the United States is cancer of the?

14 Which research study demonstrated a link between Vitamin E consumption and a decreased risk of heart disease in smokers?

15 How can we increase our absorption of dietary magnesium?

16 Which of the following foods are good sources of magnesium?

17 Which of the following individuals would be at risk for a Vitamin K deficiency?

Page 2

1 Insensible water loss is?

2 Mary drinks 600 milliliters of water. How many cups is this equivalent to?

3 Diets high in sodium are associated with?

4 ________ is a potentially fatal condition characterized by the failure of the body's heat-regulating mechanisms.

5 Julie expends 2,400 calories per day. Assuming average environmental conditions, how much water should she consume?

6 Which of the following is a diuretic?

7 The process of adding hydrogen to an unsaturated fatty acid and creating a more solid fat is called?

8 What is the primary form of lipid in the diet?

9 Which of the following is a rich source of polyunsaturated fatty acids?

10 What element makes protein different from carbohydrates and fat?

11 Which of the following supplements would you recommend that a vegan add to his or her diet?

12 Of the 20 amino acids relevant to the human body, how many are considered essential?

13 Which of the following hormones is released when your blood glucose levels fall too low?

14 Which of the following is the preferred fuel for most body functions?

15 ________ is a highly branched arrangement of glucose molecules found in liver and skeletal muscle cells.

16 ________ is a process that uses gamma rays to eliminate harmful bacteria in meat and poultry.

17 Which of the following is associated with the development of ketosis?

18 What are probiotics?

Page 3

1 Discuss the impact of environmental contaminants on the current recommendations for safe fish consumption. How does this relate to the advice to consume abundant sources of omega-3 fatty acids?

2 Jack has a strong family history of heart disease. What lifestyle factors are important for Jack to be aware of to decrease his cardiovascular disease risk?

3 Due to the fact that our bodies are constantly trying to maintain homeostasis and regulate proper fluid balance, imagine what would happen from a physiological perspective if you ate a big bag of salty chips or popcorn. Please list what happens in the body as a result of the consumption of excess sodium, and explain the reasons behind these bodily changes.

4 Explain in detail how the bones in our body serve as a calcium bank for the body. Give examples and illustrate the chemistry.

5 Describe the three stages of iron-deficiency anemia and how each one affects the body's ability to use oxygen.

6 Describe how low-grade inflammation is involved in the development of heart disease.

7 What is meant when a food is labeled 100% organic? Explain the process of becoming organic.

8 Describe eating habits in toddlers and suggest how parents can encourage healthy eating habits during this time.

9 Using the My Pyramid food guide, describe a healthy diet plan for a vegan. Include types and servings of food within the five categories of the pyramid, as well as comment on nutrients that may need additional attention.

5 Incurring an expense for advertising on an account would be recorded by?

6 Adjusting entries are primarily needed for?

7 Current assets include cash and all other assets expected to become cash or be consumed?

8 Which of the following is never a current liability account?

9 Popson Inc. incurred a material loss that was not unusual in character, but was clearly an infrequent occurrence. This loss should be reported as?

10 On May 1, Foxtrot Co. agreed to sell the assets of its Footwear Division to Albanese Inc. for $80 million. The sale was completed on December 31, 2012. The following additional facts pertain to the transaction:

The Footwear Division qualifies as a component of the entity according to GAAP regarding discontinued operations.

The book value of Footwear's assets totaled $48 million on the date of the sale.

Footwear's operating income was a pre-tax loss of $10 million in 2012.

Foxtrot's income tax rate is 40%.

In the 2012 income statement for Foxtrot Co., which of the following would it would report?

11 In comparing the direct method with the indirect method of preparing the statement of cash flows?

12 Cash flows from investing activities do not include?

13 Merchandise sold FOB shipping point indicates that?

14 Todd Sweeney is an artist who sells his work under consignment. (He displays his work in local barbershops, and customers buy the work there.) Sweeney recently transferred a painting to a local barbershop. Sweeney most likely should recognize revenue when?

15 LeAnn wishes to know how much money she should set aside now at 7% interest in order to accumulate a sum of $5,000 in 4 years. She should use a table for the?

16 Zulu Corporation hires a new chief executive officer and promises to pay her a signing bonus of $2 million per year for 10 years, starting 5 years after she joins the company. The liability for this bonus when the CEO is hired?

17 Cash may not include?

18 Oswego Clay Pipe Company sold $46,000 of pipe to Southeast Water District #45 on April 12 of the current year with terms 1/15, n/60. Oswego uses the gross method of accounting for cash discounts. What entry would Oswego make on June 10, assuming the customer made the correct payment on that date?

19 In a periodic inventory system, the cost of purchases is debited to?

20 During periods when costs are rising and inventory quantities are stable, cost of goods sold will be?

21 In applying LCM, market cannot be?

22 Included in the computation of the cost-to-retail percentage for the LIFO retail method are?

Page 2

1 Fulbright Corp. uses the periodic inventory system. During its first year of operation, Fulbright made the following purchases (listed in chronological order of acquisition): Sales for the year totaled 270 units, leaving 10 units on hand at the end of the year. What is the ending inventory using the FIFO method?

2 What is an accrued liability? Please provide two examples?

3 A company's investment in receivables is affected by several related variables. Give an example of this interrelationship?

Page 3

1 It is the end of the accounting period, and your boss asks you to help determine the inventory balance to place in the company's balance sheet. Explain which physical quantities of inventory you will include, and which you will exclude?

2 You are reviewing the December 31, 2012 financial statements of Ellie's Antiques that is considering an initial public offering of its shares. The following items come to your attention:

a. Included in long-term investments are 10-year U.S. Treasury bonds that mature March 31, 2013. The bonds were purchased November 20, 2012.

b. The property, plant, and equipment account is stated at cost, except that it includes a parcel of land purchased for investment purposes at a cost of $40,000. Because of rising land prices, the value of the land has been written up to $60,000. The company has an independent appraisal that attests to this amount.

c. The accounts receivable account includes $20,000 due in 3 years from officers and employees and a 2-year, 8% note for $25,000 due from a customer. The loan enabled the customer to buy equipment needed to process materials purchased from Ellie's Antiques.

Please discuss how the above items should be classifed and accounted for.

1 Which of the following is true regarding the evaluation of projects?

2 There are several disadvantages to the payback method, among them?

3 You can ensure that an investment is expected to create value for?

4 What is the net present value of a project with the following cash flows, if the discount rate is 15 percent?

Year

0

1

2

3

4

Cash flow

-$45,000

$11,520

$13,630

$16,470

$18,990

5 Leward Manufacturing is spending $115,000 to update its equipment. This is necessary if the firm wishes to be competitive in the marketplace and provide a wide array of product models. The company estimates that these updates will improve its cash inflows by $27,500 a year, for eight years. What is the payback period?

6 The postponement of a project until conditions are more favorable?

7 ____________, refers to the situation a firm faces when it has positive net present value projects, but cannot obtain financing for those projects.

8 ABC Cameras is considering an investment that will have a cost of $10,000 and the following cash flows: $6,000 in year 1, $4,000 in year 2 and $3,000 in year 3. Assume the cost of capital is 10%. Which of the following is true regarding this investment?

9 Assume Company X plans to invest $60,000 in new computers. Using Tables 9.6 and 9.7 of your textbook (Page 277), which is the first year depreciation amount under MACRS?

10 Assume a project has earnings before depreciation, and taxes of $110,000, depreciation of $40,000, and that the firm has a 30 percent tax bracket. What are the after-tax cash flows for the project?

11 Which of the following statements is true regarding systematic risk?

12 Which statement is not true regarding risk?

13 The stock of Chocolate Galore is expected to produce the following returns, given the various states of the economy. What is the expected return on this stock?

State of Economy

Probability of State of Economy

Rate of Return

Recession

.02

-.06

Normal

.88

.11

Boom

.10

.17

14 You own a portfolio that consists of $8,000 in stock A, $4,600 in stock B, $13,000 in stock C, and $5,500 in stock D. What is the portfolio weight of stock A?

15 You currently own a portfolio valued at $24,000 that has a beta of 1.1. You have another $8,000 to invest, and would like to invest it in a manner such that the risk of the new portfolio matches that of the overall market. What does the beta of the new security have to be?

Page 2

1 Company insiders cannot earn excess profits based on the knowledge they have related to their employer if the financial markets are?

2 Royal Petroleum Co. can buy a piece of equipment that can be financed with debt at a cost of 9 percent (after-tax) and common equity at a cost of 16 percent. Assume debt and common equity each represent 50 percent of the firm's capital structure. What is the weighted average cost of capital?

3 An issue of common stock is expected to pay a dividend of $4.80 at the end of the year. Its growth rate is equal to eight percent. If the required rate of return is 13 percent, what is its current price?

4 Which of the following is true regarding the cost of debt?

5 Which of the following is not true regarding the cost of retained earnings?

6 A project has the following cash flows. What is the internal rate of return?

Year

0

1

2

3

Cash flow

-$195,600

$99,800

$87,600

$75,300

7 Which one of the following is a correct statement regarding a firm's weighted average cost of capital (WACC)?

8 The six percent preferred stock of FKH Manufacturing is selling for $62 a share. What is the firm's cost of preferred stock, if the tax rate is 34 percent and the par value per share is $100?

9 Which one of the following statements is true concerning a bankruptcy?

10 Which of the following statements is false regarding the cost of capital?

11 Select any actions that do not affect the cash account.

12 Which of the following statements is true?

13 All else constant, a decrease in the accounts receivable period will?

14 The Yellow Box has the following estimated quarterly sales for next year. The accounts receivable period is 45 days. What is the expected accounts receivable balance at the end of the third quarter? Assume each month has 30 days.

15 Why is maximization of the current value per share a more appropriate financial management goal than profit maximization?

Page 4

1 Which of the following is true regarding put bonds?

2 The document that outlines the covenants and duties existing between bondholders and the issuing corporation is called?

3 Company A has a bond outstanding with $90 annual interest payment, a market price of $820, and a maturity date in five years. Assume the par value to be $1,000. What is the bond’s yield to maturity?

4 Which of the following does not reduce collection float?

5 Storage and tracking costs, insurance and taxes, and losses due to theft are examples of?

6 Recent announcements of massive layoffs have increased stock prices for certain companies. Critics argue that this reaction encourages companies to fire employees. Do you agree or disagree?

7 What is an opportunity cost? Provide two real-life examples of opportunity costs for a project. Should opportunity costs be included in the project analysis process? Why or why not? Explain your rationale.

8 What is the difference between business risk and financial risk? If Company A has a higher business risk than Company B, should its cost of capital be higher? Why or why not? Explain your rationale.

9 What are some important elements of the collection policy?

10 Consider the following statement: “In order to maximize value, all firms should maintain a 30/70 debt to equity ratio”. Do you believe this statement is correct? Explain your rationale.

2 A company has a cost that is $2.00 per unit at a volume of 12,000 units and $2.00 per unit at a volume of 16,000 units. What type of cost is this?

3Which of the following is a manufacturing cost?

4 An allocation base is ?

5 Equivalent units are calculated by?

6 In the assembly department, all the direct materials are added at the beginning of the processing. Beginning Work in Process inventory consists of 2,000 units with a direct materials cost of $31,860. During the period, 15,000 units are started and direct materials costing $250,000 are charged to the department. If there are 1,000 units in ending inventory, what is the cost per equivalent unit?

7 The range of activity for which estimates of cost behavior are likely to be accurate is the?

8 Beaudreaux Motors is operating at its break-even point of 16,000 units. Which of the following statements is not true?

9 Which of the following is treated as a product cost in variable costing?

10 When the number of units sold is equal to the number of units produced, net income using full costing will be?

11 A major problem with cost-plus contracts is that they?

12 Which of the following steps is not involved in the ABC approach?

13 Which of the following is not a term used to describe the additional costs incurred as a result of selecting one decision over another?

Page 2

1 Distinguish managerial accounting from financial accounting. Include a brief discussion of the differences in the types of information provided to users as well as the differences of the users of the accounting information.

2 ) Pacific Airlines has three service departments; ticketing, baggage handling, and aircraft maintenance. Costs of these departments are allocated to two revenue producing departments, domestic and international flights. Costs for the service departments are not separated into fixed and variable and the totals are as follows:

Ticketing

$4,000,000

Baggage handling

$2,000,000

Aircraft maintenance

$6,000,000

3 Gina's Boutique makes custom jewelry. One item, the guru necklace, is a best seller and sales in units for the first quarter are as follows:

January 100,000 units
February 150,000 units
March 180,000 units

4 Coyote Trading uses a predetermined manufacturing overhead rate of $12 per machine hour. Last year the company had actual overhead of $898,000 and 75,000 machine hours.

(a) Compute the amount of manufacturing overhead applied.
(b) Compute the amount of over/underapplied overhead.
(c) What is the disposition of the over/under applied overhead

Page 3

1 An investment of $185,575 is expected to generate returns of $65,000 per year for each of the next four years. What is the investment's internal rate of return?

2 Legal Beagals Inc. is a legal services firm that files incorporation papers for small businesses. They charge $1,000 per application. This year's income statement shows the following:

2 The Canadian Services office did a survey of 150 travelers in which they asked if the traveler's first language was French or English. Another question asked was whether the traveler was Canadian born. The results follow.

3 The Canadian Services office did a survey of 150 travelers in which they asked if the traveler's first language was French or English. Another question asked was whether the traveler was Canadian born. The results follow.4 The Canadian Services office did a survey of 150 travelers in which they asked if the traveler's first language was French or English. Another question asked was whether the traveler was Canadian born. The results follow.5 In a study done by the National Health Foundation, it was determined that the mean number of headaches for woman is 14 per year with a standard deviation of 2.5.6 Find the following probability involving the Standard Normal Distribution. What is P(z < 0.25)?

7 Suppose you are performing a hypothesis test on a claim about a population proportion. Using an alpha = 0.05 and n = 100, what is the rejection region if the alternate hypothesis is Ha: p > 0.75?

8 Suppose you are performing a hypothesis test on a claim about a population proportion. Using an alpha = 0.01 and n = 90, what two critical values determine the rejection region if the null hypothesis is: Ho: p = 0.35?

9 If the variance of some data is 225 inches2, what is the standard deviation?

10 Determine the minimum required sample size if you want to be 99% confident that the sample mean is within 2 units of the population mean given sigma = 7.8. Assume the population is normally distributed.

13 Scores on an exam for entering a private school are normally distributed, with a mean of 72 and a standard deviation of 6. To be eligible to enter, a person must score in the top 5%. What is the lowest score you can earn and still be eligible to enter?

14 A shipment of 50 television sets contains 4 defective units. How many ways can a vending company buy four of these units and receive no defective units?

15 The time required to process a ton of sugar cane in a plant in Central America in a recent year was normally distributed with a mean 4 days and a standard deviation of 0.5 days (i.e., 12 hours). What is the probability that it will take more than 3 days to process a ton of sugar cane?

16 The earnings per share (in dollars) for McDonald's Corporation are given by the equation y-hat = 0.599 + 0.046a - 0.015b where 'a' represents total revenue (in billions of dollars) and 'b' represents total net worth (in billions of dollars). Predict the earnings per share when total revenue is $10 billion and net worth is $5 billion.

17 The estimated value for the correlation coefficient for this graph might be?

PAGE 2

1 A restaurant claims that its speed of service time is less than 18 minutes. A random selection of 36 service times was collected, and their mean was calculated to be 17.7 minutes. Their standard deviation is 3.1 minutes. Is there enough evidence to support the claim at alpha = 0.08? Perform an appropriate hypothesis test, showing each important step. (Note: 1st Step: Write Ho and Ha; 2nd Step: Determine Rejection Region; etc.)

3 A hospital is hoping to introduce a Fast Care Unit. The hospital claims that after the initial run, 78% of the patients were pleased with the service. We ask 10 randomly selected patients whether or not they are pleased with the service.

4 The average monthly gasoline (gallon) purchase for a family with 2 cars is 62 gallons. This statistic has a normal distribution with a standard deviation = 6 gallons. A family is chosen at random.

5 A marketing firm wants to estimate the average amount spent by patients at the hospital pharmacy. For a sample of 80 randomly selected patients, the mean amount spent was $74.20 and the standard deviation was $11.45.

6 A drug manufacturer wants to estimate the mean heart rate for patients with a certain heart condition. Because the condition is rare, the manufacturer can only find 27 people with the condition currently untreated. From this small sample, the mean heart rate is 93 beats per minute with a standard deviation of 7.

7 For the following statement, write the null hypothesis and the alternative hypothesis. Then, label the one that is the claim being made.
An internet service provider claims that the mean download speed is more than 100K.

8 A manufacturer claims that the mean lifetime of its fluorescent bulbs is 1050 hours. A homeowner selects 40 bulbs and finds the mean lifetime to be 1030 hours with a standard deviation of 80 hours. Test the manufacturer's claim. Use alpha = 0.06.

(TCO A) On what should the government-wide financial statements report? (Points : 5)

(TCO A) Which of the following groups is considered a primary user of a state or local government’s general-purpose external financial statements? (Points : 5)

(TCO B) According to GASB standards, when should transfers be recognized? (Points : 5)

(TCO C) Comparisons of budgeted versus actual revenues and expenditures are a requirement of which of the following situations? (Points : 5)

(TCO C) Which of the following will increase the fund balance of a government at the end of the fiscal year?(Points : 5)

(TCO D) The revenues account of a government entity is debited when (Points : 5)

(TCO D) The General Fund used electricity provided by the city-owned electric utility (an enterprise fund of the city). The General Fund general journal entry to record the transaction will include (Points : 5

(TCO E) During the year, a wealthy local businessman donated a building to city of Perris. The original cost of the building was $340,000. Accumulated depreciation at the date of the gift amounted to $220,000. The appraised fair market value of the donation at the date of the gift was $525,000 of which $35,000 was the value of the land on which the building was situated. At what amount should the city record this donated property in the governmental activities accounts at the government-wide level? (Points : 5)

(TCO E) Which of the following resource inflows would be recorded as a revenue of a debt service fund? (Points : 5)

(TCO G) Which of the statements concerning agency funds is a true statement? (Points : 5)

(TCO J) Which of the following items are typically reported differently between the governmental fund statements and the governmental activities column of the government-wide statements? (Points : 5)

(TCO H) A condition whereby the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis is called a(an) (Points : 5)

(TCO I) Which of the following items would not affect the amounts reported in the Revenues and Gains section of the statement of activities for a private college or university? (Points : 5)

(TCO I) The primary source of revenues for most hospitals are (Points : 5)

(TCO I) How would the estimated uncollectible tuition and fees be reported on the financial statements of a university? (Points : 5)

(TCOs D, E, F, and G) Please list the name of the fund(s) in which each of the following transactions or events would be recorded.

(1) Bonds of $1,000,000 from which the proceeds are to be used for the construction of a new City Hall building.
(2) Salaries of $170,000 were paid to personnel in the office of the mayor.
(3) Installment payments of $75,000 were received from the property owners that were assessed for the street improvement project.
(4) Over $65,000 of funds were received by employees by payroll deductions that are to be used for the purchase of United States Government Bonds for those employees on an individual basis.
(5) Materials of $140,000 were to be used for the general repair of the streets that were purchased by the city.
(6) Excess funds of $60,000 were transferred from the water utility to the General Fund. (Points : 30)

(TCO F) The garbage collection of the city of Rockwell could be accounted for through the General Fund, a Special Revenue Fund, or an Enterprise Fund. Please identify the circumstances in which each of these fund types might be appropriate. (Points : 40)

(TCO I) During the fiscal year of June 2012, Jefferson General Hospital, a not-for-profit healthcare organization, had the following revenue-related transactions. (The amounts are summarized for the entire year.)

(1) Healthcare services that are provided to inpatients and outpatients amounted to $9,640,000, of which $420,000 were for charity cases, $865,000 was paid by uninsured patients, and $8,355,000 was billed to Medicare, Medicaid, and other insurance companies.
(2) Pharmaceutical drugs and medicines sold by the hospital pharmacy amounted to $830,000, all of which was paid by the customer or the insurance companies.
(3) Medicare, Medicaid, and third-party payers (insurance companies) approved and paid $5,640,000 of the $8,355,000 billed by the hospital during the year (please review transaction #1).
(4) A contribution of $4,000,000 (of which is unconditional) was received in cash from a donor to construct a new facility for cancer patients. The full amount is expendable for that purpose. No activity has taken place during the current year.
(5) A total of $810,000 was received from the following activities/sources: cafeteria and gift shop sales, $630,000, unrestricted transfers from the Claremont Hospital Foundation, $110,000, and fees for medical transcripts, $70,000.
(6) The allowance for uncollectible receivables was increased by $1,350.

Complete the following requirements:…(Points: 40)

(TCO F) (1) What are the key differences between the cash flow statement requirements for Enterprise Funds and those for business enterprises? (2) Please identify the proper classification on the statement of cash flow of the Enterprise Fund versus the Private Business Enterprise.

Transaction Type

Government Classification

Business Classification

Capital asset acquisition/sale

Capital debt issue/retirement

Noncapital debt issue/retirement

Interest paid on capital debt

Interest paid on noncapital debt

Receipt of investment earnings

(Points : 40)

(TCO I) During the fiscal year of June 2012, Lincoln General Hospital, a not-for-profit healthcare organization, had the following revenue-related transactions. (The amounts are summarized for the entire year.)

(1) Healthcare services that are provided to inpatients and outpatients amounted to $11,690,000, of which $620,000 were for charity cases, $972,000 was paid by uninsured patients, and $10,098,000 was billed to Medicare, Medicaid, and other insurance companies.
(2) Pharmaceutical drugs and medicines sold by the hospital pharmacy amounted to $950,000, all of which was paid by the customer or the insurance companies.
(3) Medicare, Medicaid, and third-party payors (insurance companies) approved and paid $8,150,000 of the $10,098,000 billed by the hospital during the year (please review transaction #1).
(4) A contribution of $4,500,000 (of which is unconditional) was received in cash from a donor to construct a new facility for cancer patients. The full amount is expendable for that purpose. No activity has taken place during the current year.
(5) A total of $940,000 was received from the following activities/sources: cafeteria and gift shop sales, $780,000, unrestricted transfers from the Claremont Hospital Foundation, $95,000 and fees for medical transcripts, $65,000.
(6) The allowance for uncollectible receivables was increased by $1,670.
Requirements:
a. Record the preceding transactions in general journal form.
b. Prepare the unrestricted revenues, gains, and other support section of Lincoln General Hospital’s statement of operations for the current year.

22. (TCO E) Enter the template provided in the answer space and record the following transactions in the Capital Projects Fund in the general journal for the following transactions.

a. McDowell County issued $4,000,000, 5% bonds with interest payable on a semiannual basis on July 1 and January 1. The bonds sold for 102 on July 30, 2012. Proceeds from the bond issue were to be used for construction of the new sheriff station with all interest and premiums received to be used to service the debt issue.
b. A state grant of $250,000 was received to help finance the construction of the sheriff station.
c. The General Fund transferred $300,000 for use in the construction of the new sheriff station.
d. A federal grant of $500,000 was received to help finance the construction of the new sheriff station.
e. A construction contract was awarded to the Young Construction Company in the amount of $4,750,000.
f. The new sheriff station was completed on May 1, 2013, three months ahead of schedule. The construction expenditures amounted to $4,870,000. When the project was completed, the cost of the sheriff station was allocated to the following, $310,000 for land, $4,180,000 for the building, and the remainder to equipment.
g. The temporary accounts of the capital projects were closed to Fund Balance-Restricted. The amounts are restricted due to the bond issue that is related to the construction of the sheriff station. The capital projects fund will be closed by transferring remaining funds to the debt service fund for repayment…. (Points: 40)

23.(TCO F) The following Statement of Cash Receipts and Disbursements was prepared by the bookkeeper of the City of Glass City Museum of Science. The museum is a component unit of the City of Glass City and must be included in the city’s financial statements. It began operations on January 1, 2012 with no liabilities or commitments and only two assets….(Points: 40)

1. (TCO 1) Who are the users of managerial accounting information? How does their use of accounting information differ from the users of financial accounting information?

2. (TCO 2) What is an indirect labor cost? What is an example of an indirect labor cost?

3. (TCO 3) What is job-order costing? What type of company would us job-order costing?

4. (TCO 4) What is a variable cost? What is an example of a variable cost?

5. (TCO 5) What is full costing? How does it differ from variable costing?

6. (TCO 6) Explain why companies might choose to allocate the costs of their service departments (ie. Human Resources, Maintenance, Mailroom, etc...) to their production departments. Also describe some typical bases companies use to base their allocations on. Last, what should a company be mindful of when analyzing the profitability of segments that have allocated costs.

7. (TCO 7) What is an incremental cost? What is an example of one?

8. (TCO 8) What is cost plus pricing? How does the company determine the profit level?

9. Gina's Boutique makes custom jewelry. One item, the guru necklace, is a best seller and sales in units for the first quarter are as follows:
January 100,000 units
February 150,000 units
March 180,000 units
Desired ending inventory is budgeted at 20% of next month sales.
Compute...

10. Acme Fireworks uses a traditional overhead allocation based on direct labor hours. For the current year overhead is estimated at $1,000,000 and direct labor hours are budgeted at 200,000 hours. Actual hours worked were 195,000 and actual overhead was $978,000.
(a) Compute the predetermined manufacturing overhead rate.
(b) Compute the applied manufacturing overhead.
(c) Compute....

11. Joanie Corp sells it products on a credit basis only . Credit sales are collected 40% in the month of sale and 60% the following month. Sales for the first quarter are as follows:
January $100,000
February $150,000
March $125,000
Compute...

12. (TCO 9) A project will require an initial investment of $300,000 and will return $75,000 each year for eight years. If taxes are ignored and the required rate of return is 9%, what is the project's net present value? Based on this analysis, should the company proceed with the project?

13. The following data (in thousands of dollars) have been taken from the accounting records of Karmana Corporation for the just-completed year.
Sales ...............................................................$950
Raw materials inventory, beginning .....................$10
Raw materials inventory, ending .........................$30

(TCO B) Which of the following characteristics does NOT apply to subchapter S corporations?

Loss limited to investment

Income tax at corporate rates

Limited to fewer than 75 shareholders

Unlimited life

(TCO D) The planning of cash needs of a business is conducted using a life cycle approach. Which of the following tasks is/are performed in the development stage of the life cycle?

Obtain seed financing

Prepare business plan

Create and build value

Obtain seasoned financing

Train Management

(TCO C) What is meant by the statement that a balance sheet provides a snapshot of a venture’s financial position as of a point in time? Why must a balance sheet be in balance? Describe briefly how the two sides of the statement are connected. What specific accounts on the Balance Sheet are connected to the Income Statement and the Statement of Cash Flows?

(TCO B) The CEO of Hernandez Database Design died today; she owned the firm. Discuss the impact on the business’ life and operations if its corporate form is a) a sole proprietorship and b) if it is a C Corporation?

(TCO C) AudioFile would like to know its EBDAT breakeven level. The company has only one product, the Voce9000 speaker, a high-end speaker that downloads media player files into its own memory. The firm’s speakers sell for $10,000 each. Each speaker costs $6,500 in materials and manufacturing costs (all production is outsourced to an external manufacturer). The firm’s headquarters facility lease is $350,000 annually, its marketing expense is $100,000 per year, and salary costs are $550,000 annually. Complete the following, and show all your calculations for each.

Part 2: If the firm sells 400 speakers, what will be its c) gross profit percentage, d) operating income, and e) operating income percentage? (Show all calculations)

(TCO A, D) H2Oh! has patented a brilliant technology that transforms dry air into drinkable water. In 2012, the company has $8 million in revenue, and $1.2 million in net income. H2Oh! began the year with $5 million in book equity on January 1. Complete the following, and show all your calculations for each:

b) Assuming the company pays out no dividends in 2012, what is the firm’s maximum sustainable growth rate?

c) Compare H2Oh!’s sales growth rate with the firm’s maximum sustainable growth rate (which you just calculated in (b). Will the firm be able to support its growth through internally generated funds? If so, discuss the financial reasons why this is so using the textbook’s concept of maximum sustainable growth rate. If you believe the firm will not be able to support its growth, explain why and discuss what action management must take.

d) Part 1: If the firm pays out $400,000 in dividends, what is the firm’s retention rate? Part 2: Assuming the firm pays out $400,000 in 2012 dividends, what is H2Oh!’s sustainable growth rate?

e) After $400,000 in 2012 dividends have been paid on December 31, what will be H2Oh!’s new book equity balance?

f) Use your final answer for (e) to answer the following: assume that the H2Oh!’s balance sheet shows that the firm has assets with a book value of $7 million. How much debt does the firm have?

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